With life expectancy on the rise, many South Africans face a retirement crisis. This article explores the challenges of planning for a longer life and offers insights into how to adapt retirement strategies for a sustainable future.
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Imagine planning a long road trip with just enough fuel to reach your expected destination, only to discover that your destination is further than you had planned. That is where millions of South Africans now find themselves with retirement. The plan was built for a shorter journey, but the journey itself has changed dramatically.
According to the World Health Organisation, average global life expectancy now stands at around 73 years. In South Africa, a 65-year-old has a total life expectancy of around 80.7 years, and those who reach 70 can expect to live to 83. That’s because global life expectancy has risen sharply over the past century, driven by advances in medical technology, improved nutrition, wider access to sanitation and better public health infrastructure.
This is, in many respects, a remarkable achievement. But it also creates a financial challenge that most traditional retirement models were never designed to handle. The old blueprint assumed a relatively predictable endpoint. Pensions were structured accordingly, savings targets were set with that in mind, and the concept of running out of money in retirement was, for most people, a theoretical concern rather than a lived one. That is no longer the case.
The reality for most South Africans is sobering. According to the 10X Investments Retirement Reality Report, nearly three in ten South Africans over 50 say their retirement plan is probably or definitely not on track. That gap is serious enough when retirement lasts a decade. Stretched across 25 to 30 years, it becomes a crisis.
For many, the barrier is not indifference but economic pressure. When the end of the month leaves nothing over, retirement feels like a problem for another day. The risk is that another day arrives sooner than expected, and the money simply is not there to last the distance.
The longevity economy: a new phase of life
Economists and researchers have begun referring to the over-50s as the "longevity economy", a vast and rapidly growing segment of the population that is healthier, more active and more financially engaged than any previous generation at that age.
In South Africa, the number of people aged 60 and over has grown from 3.6 million in 2002 to 6.6 million in 2025, and that figure is projected to keep rising. This is a generation that is largely underserved by financial products and services still anchored to outdated assumptions about what later life looks like.
The three-stage model of life, education, then work, then retirement, is giving way to something more fluid. The World Economic Forum has described this as the emergence of a multi-stage life, where career breaks, second acts and flexible working become the norm rather than the exception. In South Africa, this is already a lived reality for many. Labour market participation among older South Africans, while still low overall, is shifting, with older women in particular increasingly remaining economically active. Additionally, nearly 90% of South Africans under 60 expect to continue working in some capacity beyond their formal retirement age, with many planning to pursue part-time work or additional income streams. This is partly aspirational and partly a financial necessity driven by inadequate savings.
Living longer and remaining healthier for more of those years means the expenses of retirement are sustained for far longer than previously assumed. Healthcare costs, inflation, lifestyle spending and unforeseen care needs all compound over a 25 to 30-year retirement in ways that a 10 to 15-year retirement simply does not. The financial resilience required is of an entirely different order, and South Africa's savings landscape makes this challenge especially acute.
How much do you actually need?
This is where many retirement plans fall short, not through negligence, but through underestimation. According to the 10X Retirement Reality Report, an estimated 6% of economically active South Africans appear to be on track to retire comfortably. That means around 94% of the population is heading towards retirement without sufficient provision.
A useful general guideline, often used to understand what you actually need, is what planners sometimes call the 300 rule: take your expected monthly living expenses and multiply by 300. The result is the approximate capital needed at retirement to sustain that income for 25 years, assuming a modest drawdown rate of around 4 to 5% annually.
Consider this example of someone retiring at 60 and living to 85 or beyond. That is potentially 25 to 30 years of income needed, or 300 to 360 months of living costs to fund from a pot they have stopped adding to. At monthly expenses of R20,000, the 300 rule points to an estimated required capital of R6,000,000. At R30,000 per month, that figure rises to R9,000,000. While these numbers do not account for inflation, investment returns, changes in income, longevity beyond assumptions or unexpected healthcare costs, all of which will affect the real-terms value of any pot over three decades, they do, however, illustrate the sheer magnitude of capital required to fund retirement comfortably.
Choosing the right retirement product matters enormously. The right choice depends on individual circumstances, health, other income sources and risk tolerance, and taking qualified financial advice before making that decision is strongly advisable. Retirement income solutions, such as life annuities or living annuities, each carry different risks, benefits, and suitability considerations depending on individual circumstances.
Building a retirement plan that lasts
Longevity changes everything. Retirement is no longer a short, predictable phase, fundamentally reshaping how planning must work.
The practical foundations start early. Carrying debt into retirement reduces flexibility and increases pressure on already stretched income, and debt reduction is often considered an important objective in retirement planning. In general financial planning discussions, strategies such as working longer may have a positive impact by extending contributions, delaying drawdown and allowing compounding to continue.
Equally important is what happens along the way. According to the 10X Retirement Reality Report, approximately 56% of South Africans who change jobs withdraw their retirement savings, despite preservation remaining one of the most decisive factors in long-term outcomes. Every withdrawal resets progress and weakens the end result.
Once in retirement, sustainability comes down to three variables: fees, drawdown rates and diversification. These factors are widely recognised in financial planning as influencing long-term sustainability, while a well-diversified portfolio remains essential to navigating volatility over a long time horizon.
Ultimately, longevity is not the risk. Under-preparation is. The question is not just whether you can retire, but whether your plan can sustain the life you are likely to live for as long as you’re likely to live it.
* Gwele is the senior investment consultant at 10X Investments.
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